FX.co ★ US Core PCE Inflation Ticks Up to 3.0% in December, Easing Disinflation Hopes

The United States Core PCE Price Index — the Federal Reserve’s preferred gauge of underlying inflation — accelerated to 3.0% year-over-year in December 2025, up from 2.8% in November 2025. The latest figure, updated on 20 February 2026, suggests that progress in cooling price pressures may be stalling after several months of gradual disinflation.

The December reading compares price changes in December 2025 with those in December 2024, while the November figure reflected a year-over-year comparison with November 2024. The uptick from 2.8% to 3.0% indicates that core inflation, which strips out volatile food and energy costs, remains above the Federal Reserve’s 2% target and could complicate expectations for the timing and pace of any future policy easing.

Investors and policymakers are likely to scrutinize whether the December rise marks a temporary bump or the start of a more persistent plateau in core inflation, as the Fed balances the risks of cutting rates too early against the need to support economic growth. With Core PCE still elevated, markets may reassess the trajectory of interest rates and adjust their outlook for borrowing costs and asset valuations in the months ahead.